The Indian Renewable Energy Development Agency Limited(IREDA) and Germany’s Development Bank KfW signed an Agreement on Thursday, 8th October, for financial assistance of 19.971 million euros (Rs. 140 crores) for the Promotion of Biomass Power Generation in India.
The Agreement was signed at KfW head office in Frankfurt, Germany in the presence of Kumar Sanjay Krishna, Joint Secretary at the Department of Economic Affairs of India’s Ministry of Finance.
The loan aims to accelerate the adoption of environmentally sustainable biomass power and cogeneration technologies in India. It will promote innovative biomass projects of combustion, gasification, methanation, and cogeneration technologies for electricity generation. Under the loan, up to seven model implementation biomass projects are to be financed. The purpose is to demonstrate how technological, institutional and financial barriers can be overcome. The project reflects the Government of India’s agenda of inclusive growth and its focus on a low carbon growth strategy for power generation in India.
The concessional loan provided by KfW to IREDA has a fixed interest rate with a 40-year repayment period. The loan agreement signed today is KfW’s 3rd Line of Credit to IREDA for promoting Renewable Energy and Energy efficiency projects in India. The first two lines together amounted to 111 million euros (Rs. 780 crores).
The Agreement forms part of the Financial Cooperation between India and Germany. German Financial Cooperation is channeled through KfW, which acts as implementing agency on behalf of the German Government. KfW is the German Development Bank and one of the largest banks in Germany.
Germany and KfW are longstanding partners of India. Since the 1950s, more than eight billion euros have been sanctioned by KfW on behalf of the Government of Germany, mainly in the fields of Energy, Financial Sector Development, Health, and Protection of the Environment and Natural Resources. Currently 12 energy sector projects with KfW loan commitments of more than 1.2 billion euro (Rs 7,700 crores) are being implemented in India. The main objective of the German Government is to work together with the Indian Government in facilitating inclusive growth, reducing poverty and meeting the Millennium Development Goals
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